Social and Economic Changes

There is a nonmilitary aspect of the administrative developments of the year which it is important to note. In themselves these developments have been the result of the determination of the people to leave nothing undone which could contribute to the winning of the war. None the less they are bound to produce lasting and far-reaching effects on the social and economic life of the community. No record of the year would be complete which did not point out the changes which have been wrought in the structure of society by the experiences of the war.

In the first place, the organic life of the community has been greatly strengthened. On the one hand, not only have enormous numbers of men, and latterly of women also, been mobilized for military and naval purposes, but the vast majority of the people are now working directly or indirectly on public service. If they are not in the army, the navy, or the civil service, they are growing food, or making munitions, or engaged in the work of organizing, transporting, or distributing the national supplies.

On the other hand the State has taken control for the period of the war over certain national industries, such as the railways, shipping, coal, and iron mines, and the great majority of engineering businesses. It has also made itself responsible for the securing of adequate quantities of certain staple commodities and services, such as food, coal, timber, and other raw materials, railroad and sea transportation, and for distributing the available supplies justly as between individual and individual in the national interest.

Regulating Prices

The Government has further had to regulate prices and prevent profiteering. It has done so partly by controlling freights, fixing maximum prices to the home producer, and regulating wholesale and retail charges, and partly by its monopoly of imported supplies. The information which the Government has obtained as to sources of supply, consumption, and cost of production, and the relations it has entered into with other Governments as to the mutual purchase of essential products which they jointly control, have, for the first time, brought within the sphere of practical politics the possibility of fixing relatively stable world prices for fundamental staples. The State has even taken the drastic step of fixing the price of the four-pound loaf at 9d., at a considerable loss to itself.

Thus the war, and especially the year 1917, has brought about a transformation of the social and administrative structure of the State, much of which is bound to be permanent. Owing to the imperative importance of speed there has perhaps been an undue expansion of the function of the Central Government. But a very large amount of work has been devolved on to local authorities and to new bodies, such as the War Agricultural Executive Committees or the Local Food Control Committees. Taking the year as a whole the Administration has been brought into far closer contact with every aspect of the life of the people, the provinces and the metropolis have been linked more closely together, and the whole community has received an education in the problems of practical democracy such as it has never had before.

The Industrial Problem

In the second place, the war has profoundly altered the conditions of the industrial problem. Since 1914 the community itself has become by far the greatest employer of labor. It has assumed control for the duration of the war over a great number of the larger private undertakings, it has limited profits by imposing an 80 per cent. excess profits tax, and it has intervened to prevent profiteering in the essential requirements of the nation. Further, the regulation of the trade unions have been suspended for the duration of the war, industry has been diluted throughout, new methods and new industries have been introduced, labor-saving machinery has been everywhere installed, and the speed of production and the number and skill of workers has greatly risen. The nation today is far better organized and far more productive than it has ever been before.

With the advent of the new Government at the end of 1916 a Ministry of Labor was created to deal with labor questions. It is still early to speak of the results of its work, but an important step toward the creation of better conditions in the industrial world has been taken in the adoption by the Government of the report of the Whitley Committee, which recommended the development of machinery in the shape of industrial councils, representatives of employers and employed throughout the country, whereby it should be possible to solve the difficulties which will arise by the process of peaceful conference and negotiation in place of the methods of industrial war. Despite all difficulties and the recent increase in industrial unrest, it is probably true to say that as the result of the war there is now a better understanding both by capital and labor of their mutual problems than at any previous time.